The study, published in the Journal of Perinatology, found that longer lengths of stay actually result in lower costs and better clinical outcomes--at least in neo-natal intensive care units.

Researchers from Duke University and analytics firm SAS applied a simulation model to the Duke NICU. They found that in a NICU with the best possible outcomes, average length of stay was three days longer than in a scenario with poor outcomes, as well as associated costs of $3 million less per year.

Researchers also found average length of stay for infants 28 or fewer weeks of gestational age was a full 20 days longer than for older infants, but the average cost was nearly $20,000 less for those same infants. Mortality was also more than 75 percent less. Furthermore, there were lower related disorders of prematurity, and 97 percent fewer cases of sepsis, for longer stays.

When all the data are viewed together, the full picture suggests hospitals may be zeroing in so hard on reducing length of stay that it keeps them from paying sufficient attention to measures more closely tied to actual clinical outcomes, according to co-lead author David Tanaka, M.D., a neonatologist at Duke Children’s Hospital.

"It's more critically important to focus on quality outcomes--not just because it's the right thing to do, but also because this is tangible evidence to the CFO that it's financially the right thing to do," Tanaka said in a statement.